10 | The Grocer | 13 January 2018 Get the full story at thegrocer.co.uk
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A merged Fox’s and Burton’s would create a stronger rival to number one player PladisFox’s and Burton’s
sweat to nail down
nal merger cash
Edward Devlin
A £400m merger of Fox’s
and Burton’s Biscuits
is on a knife edge a er
funding fell through at
the nal hurdle.
Former Golden Wonder
CEO Clive Sharpe, whose
track record includes a
spell as Burton’s chair-
man, has been corralling
support from institu-
tional investors in a bid
to bring the number two
and three biscuit manu-
facturers together.
The complex deal
would include setting up
a special purpose acqui-
sition company (SPAC)
to oat on the London
Stock Exchange for the
newly merged group – a
replica of the model used
by Nomad Foods, which
oated in New York in
2015 ahead of the acqui-
sitions of frozen food
groups Iglo and Findus.It is understood Sharpe
has secured agreements
from Fox’s owner Ranjit
Boparan, who plans to
hold 20% of the new
group, and Burton’s par-
ent Ontario Teachers’
Pension Plan, which
will exit. He has also
attracted institutional
investors to commit sig-
ni cant sums, valuing
Fox’s at about £300m
and Burton’s at £100m,
sources told The Grocer.
However, the nal
investor needed to tip
the funds over the target
pulled out at the last min-
ute, a source added.
“Clive is still working
to get one nal inves-
tor on board,” the source
said. “If that happens it
will be all systems go.”
If the deal does col-
lapse, there are a num-
ber of mid-level private
equity rms waiting inthe wings to acquire the
two businesses in the
more traditional way,
without a stock mar-
ket otation. Boparan is
understood to have held
meetings with a handful
of interested PE investors.
A combination would
create a stronger rival
to Ja a Cakes and
Digestives maker Pladis,
the Turkish-owned num-
ber one in the market,
with a merged Fox’s
and Burton’s generat-
ing annual sales of close
to £600m and hold-
ing a 20% share of the
category.
Separately, The Grocer
understands Fox’s owner
2 Sisters is very close to
selling Goodfella’s Pizza
to Nomad Foods for
£200m. Sources said the
deal could happen before
the week is out but was
more likely next week.Poundworld: ‘substantial’
new store programme
Value variety retailer
Poundworld has su ered
a sharp fall in pro ts
a er incurring £10.8m of
exceptional costs – most
relating to property.
Full-year pre-tax losses
came in at £17.1m com-
pared with a £5.4m
loss the previous year,
according to the lat-
est accounts posted at
Companies House. The
TPG Capital-owned
retailer’s turnover rose
5.6% £488.9m for the
year to 31 March 2017.
Poundworld opened
Investment in future
growth takes its toll
on Poundworld pro t
36 new shops during the
period. It closed ve out-
lets that traded under
licence, leaving a total of
355 stores by the end of its
nancial year. The stra-
tegic report said the com-
pany was looking to open
“a substantial” number
of stores in each of the
next three years.
Poundworld said it had
made signi cant invest-
ments for future growth,
including in manage-
ment, logistics and IT.
It added the weak ster-
ling had made certain
products more expen-
sive , while the risk of fur-
ther currency uctuation
remained.
During the period,
Poundworld commis-
sioned the construction
of a new purpose-built
500,000 sq distribution
centre in Normanton,
now fully operational.Thomas J Fudge’s went
through an MBO in 2016Biscuit maker Thomas
J Fudge’s Remarkable
Bakery slipped to a £1.5m
pre-tax loss in its rst
year under private equity
ownership.
Following the April
2016 deal that saw backer
Livingbridge acquire a
majority stake as part of
an MBO, sales reached
£12.7m in the 15 months
to 1 April 2017.
This represented a
16% increase on sales of
£11m in the 12 months to
30 December 2015, but
the change in account-
ing dates meant sales
declined during the
Thomas J Fudge’s
records £1.5m loss
15-month nancial period
on a pro-rata basis.
It recorded a pre-tax
loss of £1.5m compared
with a pro t of £844k in
the previous nancial
year amid rising distri-
bution costs, wages and
exceptional charges.Investment in future
on Poundworld pro t
36 new shops during the
period. It closed ve out-
lets that traded under
licence, leaving a total of
355 stores by the end of its
nancial year. The stra-
tegic report said the com-
pany was looking to open
“a substantial” numberpany was looking to openA merged Fox’s and Burton’s would create a stronger rival to number one player Pladis